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Scotland set to be first country in the world with minimum unit pricing of alcohol

The legal battle between the Scotch Whisky Association (“SWA”) and the Scottish Government over minimum unit pricing (“MUP”) of alcohol has been rumbling on for over five years, but the Supreme Court finally “scotched” the SWA challenge on Wednesday, the case having already made its way through the highest court in Scotland and the European Court of Justice.

Following a hearing in July, the seven Supreme Court Justices unanimously dismissed the SWA challenge to the Alcohol (Minimum Pricing) (Scotland) Act 2012 and the resultant draft Order proposing a minimum unit price of 50 pence, neither of which have been implemented pending the outcome of this case. In so doing they rejected the SWA’s argument that this minimum pricing proposal is disproportionate and a restraint of trade, therefore illegal under European law.

In what has been described by Edinburgh minsters as an “historic and far-reaching judgment”, the Court decided that minimum pricing “is a proportionate means of achieving a legitimate aim”. The SWA had argued that there were better ways of achieving that aim, but the Court disagreed.

According to the Institute for Alcohol Studies, a small number of countries, including Russia and Canada, and some US States, have some form of minimum pricing, but nevertheless this ruling paves the way for Scotland to be the first nation in the world to introduce MUP.

Needless to say, the decision was welcomed by Scottish ministers. Health Secretary Shona Robison said it was “ a landmark moment in our ambition to turn around Scotland’s troubled relationship with alcohol.” She referred to statistics that demonstrate that, in the period since the legislation was originally passed, the rates of alcohol-related deaths in Scotland have increased. She vowed that the Scottish Government would now press on with implementation of the policy “as quickly as possible” and said that she will shortly make a statement to Holyrood on next steps, including the timetable for introducing the new measure.

It’s estimated that alcohol misuse in Scotland results in 670 hospital admissions and 24 deaths a week, death rates being one and a half times what they were in the early 1980s. This is borne out by the 2016 figure for alcohol-related deaths of 1,265, 10% up on the previous year. Alcohol misuse is also calculated as costing Scotland £3.6 billion a year, which equates to a surprisingly high figure of £900 for every adult. Figures for 2016 show that 17% more alcohol was sold per adult in Scotland than in England and Wales.

Of course, to quote Mark Twain, “there are three kinds of lies: lies, damned lies and statistics” and figures can always be called upon in support of a particular narrative. The questions that spring to mind are: what will the minimum unit price of 50p achieve, and what will it mean in practice?

Research conducted by Sheffield University calculates that the 50 pence minimum unit price will result in 121 fewer deaths a year after 20 years. At first sight, this appears a small achievement after such a prolonged period of time, but the same study points to a drop in hospital admissions related to alcohol by over 2,000 per year in two decades’ time.

As far as the impacts on the trade are concerned, the measure seems much more likely to affect off-licences and supermarkets than the on-trade. Similarly, it will have a widely differing impact on various drinks types and products, depending on the quantities in which they are sold and, obviously, their alcohol by volume (“ABV”). By way of example, a three litre bottle of super-strength cider, at an ABV of 7.5% and containing 22.5 units of alcohol, will leap in price from £3.99 to £11.25, on the basis of research conducted by the Dundee Evening Telegraph. By contrast, a bottle of Cabernet Sauvignon red wine would only see a modest price increase – typically from £4.39 in a supermarket to £4.90 – once MUP comes in. More expensive wines and premium spirits, which are already priced above the minimum requirement per unit, will be unaffected. The price of mainstream lager brands in small amounts (typically, 4 packs) will remain broadly the same but purchasers in bulk (of packs of 12, say) will find themselves paying up to 20% more.

What of the whisky trade, who were the challengers to this proposal, bringing about the 5 year delay in it getting the green light? Calculations suggest that consumers will be unable to get their hands on a bottle for less than £14, which is markedly higher than the price currently offered on some brands by some supermarket promotions.

MUP should not trouble the on-trade, where drinks are currently priced above the minimum threshold anyway. Nevertheless, it will be interesting to see whether England and Wales follow the Scottish example. A UK Government spokeswoman said that the decision of the Supreme Court had been noted and that “minimum pricing will continue to remain under review pending the impact of its implementation in Scotland”. It is clear that the UK administration as a whole plans to continue to seek to control what it perceives as excessive alcohol consumption via taxation and pricing.

In the meantime, the SWA has said that it accepts the ruling of the Supreme Court, and that it will continue to work with the Scottish Government and others to promote responsible drinking and prevent alcohol-related harm, while at the same time looking “to the Scottish and UK Governments to support the [whisky] industry against the negative effects of trade barriers being raised in overseas markets that discriminate against Scottish whisky as a consequence of minimum pricing, and to argue for fair competition on our behalf”.

We will of course update you if we get any hint of the adoption of a minimum unit pricing policy elsewhere in the UK.